Estate planning means more than just dividing assets among family. You can also use it to support causes you love while cutting your tax bill.
You might think that being able to help others is enough to convince you, but there is another reason you should consider engaging in philanthropy.
You can cut down your tax load
Big estates face large taxes in Connecticut and nationwide. When you give to qualified charities, those gifts reduce your taxable estate. This means more money goes to people and causes you care about while reducing your gross taxable estate.
Three smart giving options
There are a few ways you can reduce taxes through giving. They are:
- Donor-advised funds: Put money into a donor-advised fund today and decide later which charities get it. You claim the tax break right away but take your time choosing recipients. It’s simple and flexible.
- Charitable remainder trusts: Want income now and charity later? Place assets in a charitable remainder trust. You get payments for years, then the leftover goes to charity. You help others while meeting your own needs.
- Family foundations: These take more work but give you total control. Your family can run the foundation together, teaching kids about giving while supporting your favorite causes.
Whichever of these options you choose can help you cut down your tax greatly.
Be strategic with your philanthropic plans
Charitable giving isn’t just about taxes. It shows what matters to you. Your family sees your values in action. They learn to care about their community. Your money keeps making a difference long after you’re gone.
When you plan early, you have more choices. You can be strategic about timing and methods. You can involve your kids in decisions. You can create a giving plan that feels right for your family.
Start building your legacy now
Estate planning works best when it reflects your whole life, not just your wealth. These strategies can get complex, so work with a tax lawyer who knows estate and charitable law. They’ll help you pick the right tools and set them up correctly.
Add charitable giving to your plan. Cut your taxes, teach your values and make a lasting impact. The causes you support today will remember your family tomorrow.